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Nevada: A good place to visit, but do you want to live here?
by Andrew Barbano
Jun 14, 2008 | 479 views | 1 1 comments | 8 8 recommendations | email to a friend | print
Bad news pounded Nevada like earthquake waves through the high desert last week.

We stand among 44 states with abominable protections from the depredations of the insurance industry. Worse, we are one of the reasons for it.

Nobody remembers the McCarran-Ferguson Act of 1945. Yes, another disaster from the powerful and thoroughly corrupt red-baiting legend from Nevada.

Because of it, insurance is among the few businesses (baseball is another) that are exempt from federal anti-trust laws. I went into the subject thoroughly on my new live call-in show (Barbwire.TV, 2 to 4 p.m. Monday through Friday, 682-4144) last week and will continue working on it.

U.S. insurers are free to conspire to fix prices and cut up the market to their mutual advantage. Not content with a license to steal, they invent other tricks like phony malpractice insurance crises to jack up rates and limit patient and consumer protections.

No law is worth the powder to blow it to hell if the government will not enforce it. Action against rich and powerful corporations has not been a federal priority and won’t be this year as we close out the seventh consecutive term of the Reagan administration.

New York Times columnist Thomas Friedman has often noted that Americans are funding both sides of the war on terror. We do the same with companies that exploit us. Corporations can not only pay for smarter lawyers than governments, but because legal expenses are deductible on tax returns, we also subsidize their machinations to flout the law. Nice racket. Perfectly legal.

BigOil has gotten so good at it that the majors can hide in plain sight, eliminating competition and colluding to fix the price of gasoline without ever talking to each other. I have chronicled the clever strategy at the Barbwire Oilogopoly Archive for more than a decade. Alas, until the day Britney Spears starts picketing ARCO stations, national media will show no interest.

Little people get crushed in the process. Nevada, as always, is in the forefront of abusing our citizens. Perhaps because we’ve lived off the earnings of vices for decades we don’t exhibit a lot of moral courage to defend our citizens against exploitation.

We promote addictions: drinking, smoking, gambling, whoring and we’ve even expanded our market by legitimizing loan sharking.

In 1981, Democratic Gov. Richard Bryan called the Nevada Legislature into special session to repeal Nevada’s usury laws so that Citibank/Citicorp could locate a credit card processing facility in Las Vegas. The bank was so ashamed of having a Gomorrah South postmark that it juiced into existence not only its own Zip code by also a mythical city, “The Lakes, Nevada,” to print as its return address.

The name proved prophetic, as Citicorp has been a principal player facilitating the drowning of a nation in debt.

The Nevada Legislature tried to reign in payday loan companies in 2005 but had to revisit the issue in 2007 because of the loan sharks’ creative maneuvering around the law.

The experience of Janie Boykins-Raschilla stands as evidence that similar attention needs to be paid to victims of exorbitant bank overdraft charges.

Tribune readers were informed last year in this column and in stories by Janine Kearney and photographer Debra Reid about how an overdraft of 34 cents turned into a Nevada version of Victor Hugo’s “Les Miserables.”

Ms. Boykins-Raschilla, who is disabled and lives on a fixed income, was given a debit card by U.S. Bank on Oddie Boulevard.

She made the mistake of taking it for a test drive when she had only $1.16 on deposit. She made a $1 purchase at a convenience store, which tacked on a 50-cent service charge.

USeless Bank could have simply refused the $1.50 charge, but its computers were set to allow the debit plus $37 and $7 for every day the account remained in an overdrafted status.

Bank employees simply told her that there was nothing they could do. Tough.

These days, the moneychangers in the temples of Mammon don’t even pretend that there are costs involved in carrying an overdraft. Actually, the expenses are so minimal as to approach non-existence — just electronic pulses on a computer mainframe somewhere between here and India.

But the costs and burdens imposed by big banking on little people are very real indeed.

With the way financial institutions share data today, she will never be able to get another checking account while the loan-shark usury remains on the books.

“At least 1,000 banks are encouraging customers with low balances to overdraw their checking accounts, allowing the banks to skirt credit laws and collect billions of dollars in new fees,” the New York Times reported in January 2003.

“The banks’ programs cover checks that would otherwise bounce and even allow people to overdraw their accounts with A.T.M. and debit cards. The fees are paid disproportionately by low- and moderate-income people, according to industry consultants who help banks create and market the programs,” the Times reported, adding “unlike lines of credit, which typically charge annual interest of up to 20 percent, the new programs charge flat fees (which) translate into an annual rate of 1,000 percent or more.”

It has gotten worse for Janie Boykins-Raschilla. The bank has been tacking on charges every month since I last wrote about this in January. The most recent total is close to $1,000. But that’s not all.

A Texas-based collection agency has started calling, demanding $806.59 for that 34-cent overdraft.

Victor Hugo, call your office. Somebody’s stealing your story.

This needs to be made a political issue this year and the 2009 legislature needs to act to protect the vulnerable like Janie Boykins-Raschilla.

Stay tuned.

Be well. Raise hell.

Andrew Barbano is a 39-year Nevadan and editor of E-mail barbano@frontpage. Barbwire by Barbano has originated in the Tribune since 1988.
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Finance Guy
June 15, 2008
Yes Andrew banks are making the largest profits from those that can least afford to be hit with the overdraft charges. As there largest profit center banks will not change there evil ways until we demand that are law makers in Cartoon City stop pandering to the special interest groups in the bank lobby. We as citizens must also be held responsible to manage our own finances in a responsible manner and not allow our accounts to become overdrawn through laziness or simple negligence.
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